Wal-Mart Stores Inc.
WMT 1.35%
is shifting its growth strategy from storefronts to the web. The retailer will open fewer than 25 new U.S. stores in its next fiscal year and undertake other cost-cutting measures aimed at freeing up funds to go in part toward building up its e-commerce capabilities. The actions at a company that opened more than 200 stores two years ago mark perhaps the strongest statement yet about the direction of Wal-Mart’s sales and signal that the company is building new distribution channels to meet the growing e-commerce market. The WSJ’s Sarah Nassauer and Austen Hufford write that Wal-Mart’s investment in e-commerce infrastructure have grown more urgent since
Amazon.com Inc.
AMZN 1.24%
bought Whole Foods, creating more direct competition for Wal-Mart’s big grocery business. The retailer is adding new delivery and click-and-collect options for groceries, and it expects recent acquisitions to boost online sales some 40% next year. The new cost-cutting shows that serving those customers while maintaining profit margins remains a challenge.

IKEA is looking at bolting a new distribution channel onto its supply chain. The icon of assemble-it-yourself furniture will test selling its Klippan sofas, Norden tables and other goods on third-party online marketplaces, the WSJ’s Saabira Chaudhuri reports, a big step in IKEA’s bid to make its furniture more accessible to more people. The company is in the midst of overhauling its strategies both online and for its stores by scaling up delivery options and placing more stores closer to urban customers. It also bought online marketplace TaskRabbit last month to help customers assemble its furniture. IKEA so far has resisted third-party sales channels but growing competition is wearing down its do-it-yourself approach. Furniture is already one of the fastest growing categories for Amazon.com Inc., and the e-commerce giant is adding warehouses and logistics operations for bulky items to reach further into consumers’ homes.

Drone deliveries are stuck in a holding pattern, at least in the U.S. An advisory panel meant to recommend rules for operating drone couldn’t agree on proposals, the WSJ’s Andy Pasztor reports, a potentially serious setback for efforts to expand commercial drone operations. The committee couldn’t reach consensus on basic questions over the categories of drones that should require remote monitoring and tracking. That will make it more difficult for federal regulators to set rules that would satisfy law-enforcement agencies, hobbyists and companies that are looking to add drones to their business mix—including delivery operators. There’s some consensus on smaller drones, but it may take two or three more years to develop technical standards for communication links and collision avoidance technology for larger drones flying at higher altitudes. That’s raising concerns in business and among policy makers who worry that big operators are looking overseas to test package delivery and other applications that promise major economic boosts.

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Bloomberg News

Meal-kit makers are making big inroads with consumers, but they’re still trying to convince investors they can deliver profits. HelloFresh SE aims to be the latest company to test the market on with an initial public offering in Frankfurt, the WSJ’s Cara Lombardo reports, with a goal of raising up to $354 million. The IPO follows this year’s offering in New York by
Blue Apron Holdings Inc.,
which has seen its shares lose nearly half their value since their debut in June. There’s no lack of growth: HelloFresh’s revenue grew nearly 50% in the first half of the year, but losses also expanded to $67 million, a measure of the tough logistics challenge the companies face. Meal-kit operators also face growing competition as supermarkets and food-delivery companies enter the market. The WSJ’s Heather Haddon reports that expansion by Amazon adds new wrinkles, bringing in an entrant that delivery services worry will be more focused on market share than profits.

QUOTABLE

‘They are one of our first competitors who doesn’t really care about making money.’

—Thomas Parkinson, co-founder of grocery-delivery service Peapod, on Amazon.

Number of the Day

23%

Decline in global container shipping prices since the end of July, according to Alphaliner.

IN OTHER NEWS

The International Monetary Fund raised its global economic outlook for 2017 and next year amid accelerating growth this year ahead of earlier expectations. (WSJ)